The Reserve Bank of India (RBI) on Thursday told the Kerala High Court that it had issued a no-objection letter to the Kerala Infrastructure Investment Fund Board (KIIFB) for issuing masala bonds under the Foreign Exchange Management Act (FEMA).
In an affidavit, the RBI said that that the KIIFB had applied through its authorised dealer (AD), Axis Bank, for getting the letter. The application was examined and ‘No-Objection’ was given on June 1, 2018, to the KIIFB. The RBI added that the issue of NOC was from the FEMA angle only and should not be construed to convey the approval by any other statutory authority or government under any other laws.
Loan Registration Number
The RBI had also allotted a Loan Registration Number (LRN) for the proposed issue of RDB (rupee-denominated bonds). While allotting the LRN, it had clarified that the issuance of LRN shall not prejudice the right of the RBI to take any action for non-compliance with extant rules, regulations, and directions issued under FEMA.
The affidavit was filed in response to a directive to explain the RBI’s roles under the provisions of the Foreign Exchange Management Act (FEMA) and the regulatory framework governing External Commercial Borrowings (ECB) in the issue of Malasa bonds.
